Over the last several weeks there have been a number of commentaries and news items suggesting that stock picking has fallen out of favor and investors, both individual and institutional, are shifting some assets to passive investments, such as index funds and ETFs. Some commentators have even suggested that stock pickers seek other employment. Not … Continued
Friday’s Wall Street Journal carried an article titled “U.S. Bonds Continue to Defy Bears”, after 10-year U.S. government bond yields closed at 2.33% last Thursday (the lowest closing level since June 2013). This reiterates the general tone of our most recent Sigma Summaries article, “The Risk of Waiting for Interest Rates to Rise”. All comments … Continued
The concept of sustainability, particularly with respect to natural resources, is the subject of a heightened level of interest. Specific proposals are increasingly appearing in corporate proxies and many companies are introducing practices that are designed to protect and extend the useful life of natural resources. While environmental sustainability is garnering increased attention, investors should … Continued
Recently The Wall Street Journal published an exceptional commentary by French free-market journalist Guy Sorman titled “The Case for Optimism,” which is reproduced below. “Are we better off than our generational predecessors? Some say no, but I’m old enough for such pessimism to seem absurd. My parents knew nothing of modern conveniences like central heating, … Continued
There is a spirited debate within the investment community on the role that “alternative investments” should play in one’s portfolio. In the simplest of terms, an alternative investment is an investment in an asset class other than stocks, bonds and cash. One of the rationales used to promote these investments is that by introducing alternative … Continued
A few days ago The Wall Street Journal carried an excellent article by Mark Hulbert, basically concluding that, “trying to time the market is by and large a losing proposition, even for the pros.” Mr. Hulbert further noted that, “it is hard to decide when the market has peaked and it’s time to get out. It … Continued
It has been said that “flying is hours and hours of sheer boredom punctuated by moments of stark panic.” The stock market would seem to have some of the same attributes. Most of the time, the popular averages tend to drift along, generally with a moderately positive bias, and relatively modest percentage gains and losses. … Continued
Wikipedia defines credit risk as the risk that a borrower will default on any type of debt by failing to make required payments. With the recent news regarding Argentina’s debt, this may be a good time for investors to carefully review their fixed income strategy. Two years ago, we blogged the question, “If You Borrow … Continued
Vote early and vote often is a tongue-in-cheek phrase used in relation to elections and the voting process, often with reference to Chicago and Cook County. Save early and save often is the key to wealth creation through the miracle of compound interest. Saving early is critical. A dollar saved and invested at 10% when … Continued
The whole issue of corporate tax rates has boiled to the surface, in conjunction with a recent uptick in relocations overseas. Known as inversions, some U.S. firms employ these in an effort to reduce their overall tax liability. The entire issue of corporate taxes, tax rates and the appropriate treatment of foreign income are properly … Continued
Recently the Wall Street Journal[1] reported that the largest public pension fund in America, “California Public Employees Retirement System” (known as Calpers), is reducing its exposure to hedge funds by an estimated 40%. When interviewed, a spokesman indicated Calpers has decided to take a “back to basics approach” with regard to investing and portfolio construction. … Continued
Recently, Paul Krugman, a well known Nobel Prize winning economist and a regular New York Times columnist, suggested that the wealthiest Americans wanted a depression because aggressive monetary policy has materially reduced their income from bonds and other interest-paying assets. While it is very likely that the wealthy, like the rest of us, have suffered … Continued
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